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tv   Closing Bell  CNBC  March 19, 2013 3:00pm-4:00pm EDT

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helped make princess kate's wedding dress. >> what is your family crest going to be? the monopoly man smoking a cigar? let's take a look at the euro. parliament voting to tax -- to not tax bank deposits. that's the latest word. a very fluid situation. much more on "closing bell" next. >> thanks very much for watching "street signs." stick with us. see you at the same time tomorrow. hi, everybody. good afternoon. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. the dow and the s&p 500 threatening to do something we haven't done all year. decline for three days in a row. >> shall we panic? i don't know what to do. i'm bill griffeth. stocks are lower. they've been lower all day. we've had just in the last few minutes here, to see if parliament rejected that
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one-time tax on bank deposits, which was a condition of its bailout plan. now investors are concerned maybe a default by cypress could intensify the euro zone's debt crisis. >> morgan stanley's adam parker, who had been negative says, no, no, no, i'm going to raise targets. in fact, one of the biggest bears turning bullish. why this market still has plenty of room to run higher. >> and don't worry, we will bust his chops about that. also, softwaremaker adobe reports earnings after the bell tonight. the company's ceo will be here exclusively to break down the results before he even speaks to analysts. that's coming up today here on "closing bell". >> let's check out where we stand before all of that. the dow jones industrial average down 25 points, off of the lows, however, even with this decline, we've seen a bit of a rally in the last 30 minutes or so. on the dow at 14,426. the nasdaq, 20 points lower. but it too having bounced off of
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the lows, which were released about 1:30 p.m. eastern time or so. s&p 500 has a similar chart pattern, as you will see, with a decline of 7 1/2. let's get the latest on the cypress bailout plan right now. bertha coombs with all the details on that. over to you, bertha. >> maria, now it is all in limbo. after two hours of debate, legislators in cyprus rejected a plea to put off today's vote. they rejected a vote to come up with some other alternative to that controversial 10 billion euro tax on savings deposits that a number of legislators today called tantamount to outright theft and extortion. a lot of them saying, why should cyprus be the guinea pig, to be the ones to have to do that. why not italy, why not france? well, they have to do it as well. in a show of hands, the 56-member body of the tiny nation voted down the measure. the final tally, 36 votes against with the 19 members of the ruling party abstaining.
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that allowed the bill now to be defeated, and they have adjourned until thursday. banks are also set to remain closed until then. a number of folks in the treasury saying that if the banks continue to remain closed, that is tantamount to encouraging people to want to move their money out of cyprus, regardless of a tax or no tax. so they may have avoided imposing that 10% tax, but it certainly doesn't shore up any confidence in keeping your money in banks there. bill? >> all right. bertha, thank you very much. >> that's what it's all about. >> that is the key, right there. let's talk about it in today's "closing bell" exchange. steven hammers out there in the ether somewhere. it's randy batsman here next to me and our own rick santelli. rick, we're all getting a civics
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lesson on cyprus, that little tiny island in the eastern mediterranean. should in this matter with you putting a portfolio together here in the united states? >> oh, absolutely. have you noticed that the european central figures are a bit like the lemmings. every few quarters, they decide to take their launch off the cliff. and this time, i can't imagine who thought this was a good idea. i mean, if you look at cyprus' economy, there are two major factors to that economy. tourism and financial services. you could kill the financial services immediately right there. so it's two underpinnings. almost like when greece was doing smo of the same things. >> but you say it matters because it could spread elsewhere? >> just the thought that somebody thought this was a good idea is scary enough to me, i would think. but it's going to be one of those things. we'll have to watch and see how it folds out. but i've got a feeling it will have to turn itself around fairly quickly. >> michael, what do you think? have you changed any of your behavior in terms of allocating capital, as a result of what we've seen in the last 48 hours? >> no, not really, maria.
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i still think that cyprus is certainly something to watch. but i think it's just part of the negotiation process, exactly what's happening in greece. we have to watch and see if it accelerates and this idea sweeps around europe, but i doubt that's going to happen. i actually think that europe is starting to present some opportunities. you have some opportunities, perhaps selectively in companies like adidas. nestle, as long as you're conservative and look for some dividends and look for some growth names that have good market penetration with consumers on a more affordable ba base, i still think there's opportunity in europe. the thing i would be concerned about right now is china. i'm a little concerned that china is starting to losing handle on what's happening in their economy, in terms of what's happening with real estate prices. that's something you've got to look at very carefully. >> okay. steven hammers, you've been skeptical of the gains anyway. you don't think they've been justified by the fundamentals.
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so are we using cyprus as an excuse to sell here, or is there real reason to stay away from this market in your view? >> you know, cyprus only has about half a percent impact in the overall economy in europe, but i'm just totally shocked that they could even think about taking folk's money. but we've got to go back to what is going on in europe. and it's still a risk-on/risk-off environment that we have to be cautious. yes, there's room to grows and investors have totally forgotten about europe since last summer. don't be surprised if it comes back later on this year. and quite heavily. >> how does it come back, though? is it the banking sector? specifically, let's talk about actual impacts to the u.s. market. >> well, the impact has a lot to do with the concern of where we're going, the kind of money we're spending and the kind of debt we have. you know, we're not too far behind europe. and obviously, we're a long way away from greece, but when you
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look at germany and france and some other companies, it's still a very dangerous environment. they still have a very low to negative growth rate. we're still looking at positive. you know, we had some good response from the housing market earlier today, but we still need to be very, very cautious. yes, there's room to grow. prices of stocks are not overvalued by no means. but we still need to be very cautious of where we're going in terms of debt and the economy. >> all right. so we're vulnerable in that regard. let's talk about investment opportunities and where you see them. randy bateman, where would you invest right now? >> there's an interesting parallel that we see going on between what happened in the sarbanes-oxley law. when it was passed, we saw a lot of merger and acquisition activity that took place. a lot of companies basically copitch lating because they couldn't cover the cost. we've got two major pieces of legislation that are taking place right now in the dodd/frank bill, in the financial sector, and in obama care, and in the health care sector. i think you're going to see some
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of the same things happening. you're going to see a lot of merger and acquisition activity. i like manhattan partners here. >> who gets hardest hit, as a result of obama care and dodd/frank? where are the areas of this market that you want to avoid, given this higher regulatory environment? >> when you see the passage of the sarbanes, you saw a lot of the smaller companies. they merged the together because they needed to get the economies of scale to cover the cost of all that regulation. i think you're going to see some of the same things happening -- >> smaller and mid-cap -- >> exactly. >> rick santelli, we did not forget about you, i assure you. while the stock market hasn't suffered too much over this, the safe havens have certainly benefited. >> they absolutely have. and the vote where they didn't pass it had virtually no effect on those markets, which have some traders scratching their heads. it's all about the euro today, and you can argue how important cyprus is, but the foreign exchange markets are the oil and the engine of all markets. if you look at a two-day chart
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of the euro, you can see it's moved lower. if you open the chart up, currently at 12860, we are hovering at the lowest close of the dollar proeblg since the 21st of november and it isn't just against the dollar. look at the euro yen, the euro pound. as a matter of fact, many down here that trade foreign exchange think that the yen's tides were changed in large part by the growing euro weakness and the fact that if you're pulling your money out, japan may be the new place to put your money in, which is really a change of sentiment over the last several weeks. >> and as the euro has gone, so has gone the u.s. market. so that's putting a little pressure on us as well. thank you all, gentleman. appreciate your thoughts on today's market action. so while cyprus continues to be a hot-button topic in business circles, it appears to not be having a huge impact on the equity markets. so what is moving the market today? bob pisani is in the middle of the action here at big board. >> take a look at the dow, bill. it's been a fairly narrow
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trading range, but also fairly narrow in europe. down two to one declining against advancing stocks. but we are still moving relative to europe. put up a chart here of the european markets versus the u.s. markets. that green is the european markets, the white is the u.s. market's intraday. they track each other perfectly. we are moving in tandem with europe. don't kid yourself, most people i talk to think they have to have some form of taxation on deposits. they have no other way of getting money and the european union is saying they have to find out some way of raising money. notice china is down again. you see that fxi, the big china etf, down again four days in a row. the china market is a real big worry. it's not getting a lot of publicity, but it's out there. also out there, these oil service numbers. yesterday, schlumberger, big oil service company, north american activity weaker than expected. american payne, big driller, said big rig prices were
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dropping. second day in a row now. oil service names are down very, very big. and this is getting a lot of discussions about what exactly it means in overall demand for oil as well as the u.s. keconom. guys, back to you. >> thank you, bob. the dow was down 57 points at the low of the day. now we're off those lows, down 33. >> this is a really important survey that we want to tell you about. up next, our exclusive cnbc fed survey. some economists are now saying that the fed could drive the markets way down by june. we'll get to the bottom of that. >> and then i have to be very careful with this story. a warning, if you are wearing lululemon pants right now, you better check in the mirror. the company's pulling some of their yoga pants because they are see-through. they're too sheer. after the break, we'll find out if there could be more cracks in lieu lulu lemon's balance sheet.
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this market. we are positive now. this market. we are positive now. up 14 points ton dow jones industrial average. we had been lower earlier today. as we approach the close, we are seeing a bit of a bias here on the buyer side. very interesting story here, as it continues to look toward the record books on the dow jones industrial average. 23 points higher on the dow right now. and after that historic rally, are we headed for a correction? top economists and market experts polls for the latest cnbc federal reserve survey seems to think. senior economics reporter steve liesman is breaking it all down for us. steve, what have you got? >> interesting results from our cnbc fed survey. 54 economists, fund managers, and analysts chiming in with their responses to our questions. first thing we want to show you their response on expected quantitative easing. this was their response in our january survey. looking for $680 billion of qe this year. now $17 billion. they added like another month.
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they're still below the pace of the fed. the fed buying at $85 billion. but they also lengthened out the timeline of the federal reserve, as you'll see in the next chart here. this is when they thought they were going to stop qe, in november of 2013. that was in our january survey. and now, all the way over here, they've added about six months that they think qe will be going on for. however, they do believe the fed will taper those purchases. that tapering, originally, we thought, was going to start in december of 2013. and now they've moved that ahead again. now it's more of a january. that's the average of all of the responses. how about the more important question about when will they finally hike interest rates or sell assets? sell assets, that's moved actually back. it's the only one that's sort of a tightening, although i will tell you in a separate question, half of the people think the fed will not sell any assets whatsoever. how about hiking rates? that's come down at about the same place it was, just the fourth quarter of 2015 average response is what we're getting. let's move on and talk about what's behind this massive rally we've had. according to our experts, 18% of
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those attributed to improvement of corporate earnings outlook. 24% say the data is responsible for it. 12% say financial stabilization and 28% said the fed's qe is what's behind the recent market rally. how about some of the outlook on the economy? back in 2011, when we faced the fiscal cliff problems, 36% probability of recession. that came down as the year went on, ratcheted back up again, when we hit another fiscal cliff issue. 28%. and that's steadily come down. an all-time low for our survey here, nick, if you wouldn't mind just zooming in and showing people that number, 17.6%, probability of recession in the next 12 months. that's the lowest we have had. and has maria said, our panelists are bearish on stocks. we'll see that next right here. this is the forecast for june 2013, over the course of the surveys we've done. you can see they've been pessimist, so it's not the best group in terms of forecasting the s&p. you can see here, 1539.
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they are forecasting a june 2013 level that is below the level where the s&p currently is. how about 14? well, they only see, as you can see over here, about a 2.7% increase, maria, between now and the end of the year. they think the best gains already are behind us, maria. >> all right, steve, thanks so much. and i guess that's one reason why any little impact to this market, people rush to sell. because they're looking for an excuse, bill. >> what a weird moment we just had here with the dow. it was up 30 points, just a moment ago, and now it's turning negative again. this is one of those moves in the market that happens so suddenly, where everybody on the floor turns to each other and looks at each other and says, what's going on? >> what just happened here? >> do you hear anything? so we're looking around. we'll find out what that's all about, if there's anything going on there. >> meanwhile, we want to dig a little deeper on the question of when the fed will back off of buying bonds, what it means for the market. steven risciutto is with us.
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the dallas federal reserve president and a cnbc contributor, he thinks the fed will stop easing sooner rather than later. gentleman, thanks for being on the program. and bob, let me kick this off with you. when you say the fed will stop sooner rather than later, what are you envisioning? >> i don't really mean stop. i think maybe they will decide that $85 billion a month is more than they need and they will phase that down somewhat. i think, though, that it goes on through 2013. one thing that mr. bernanke believes that is relevant here, is that he thinks the stats of monetary policy has to do with the level of fed assets, rather than the growth of fed assets. so if he starts tapering off and just sort of glides in, he doesn't consider that a tightening. he would consider that locking in the ease that's already prevailing. >> all right.
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let me just interrupt for very quickly, mr. cashen just came by. there was a rumor going around that maybe the imf would step in on cyprus with a bailout plan of their own, but that's been discounted all of a sudden. >> a lot of speculation about that. >> that's just speculation. but that's what was making the rounds and pushing the market higher all of a sudden there. steven, if the economy is going to continue to improve and all the metrics seem to point in that direction, things are getting better, why wouldn't the fed pull back, at least some of the liquidity they've been putting in this market, as bob mcteer suggests? >> the reality is the economy is growing, we all know that. but look back at some of the data. you average the january and february data, you discover that they are lower than the first quarter average was for all the monthly economic statistics. and i think that's important. in the fourth quarter of the year, the economy barely grew, and now we've got an economy that's probably going to be a little bit of a snackback. but the underlying support statistics just aren't improving
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on a year over year base or in a quarter over quarter basis. and i think the fed has to look at that and ask themselves a question. can they allow interest rates at the long end of the curve to start to back up against the backdrop of this economy? and i think the answer is no. they have to fight against that interest rate movement. and i think any paring back of the rate at which they are acquiring assets will be detrimental on the level of interest rates. >> well, in terms of the impact of cyprus, do you think that this should change what we're expecting, whether it be out of the federal reserve or out of corporate earnings. is cyprus is a game changer here? >> no. >> no, cyprus isn't a game changer on the federal reserve nor is it ton level of assets. i think what you have to consider with regard to cyprus is it just continues to show you that global flows of financial money or global flows of financial assets are going to favor the united states. i mean, people could argue that we're mismanaged, but when you look at the group of people that sat down to make the decision to go ahead and tax bank deposits
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in cyprus, and not understand the ramifications, you ask yourself the question, why should i have money in europe? and i think you're going to see a continued exit of money out of europe into the united states, and that's why i think the risk trade in the united states is off. stocks and bonds can both do better over the balance of 2013, at the same time. >> bob mcteer, same question to you, but as things improve economically here in the united states, yes, they would want to pull back, you would think. but when you still have the debt crisis in europe looming there, that's an argument to add more liquidity to this market. so, you know, they're sort of stuck between the rock and a hard place, as the fed usually is, right? >> well, on interest rates, if europe continues to be a little bit crazy, the longer term rates in the u.s. will to be pushed down because of safe haven considerations. i think when the fed starts to -- the fed might lose control of long rates a little bit, at some point, but i think short
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rates will state very low, and so we might get a little steepening of the yield curve down the road. but i think it will be closer to the end o. year. >> all right. gentleman, we must go. we've got a little breaking news here. see what's going on. let's get more on what's going on here. bob pisani, we had a round turn a moment ago with the dow. what are you hearing? >> we actually broke into positive territory, briefly. put up the dow. there were some headlines out, and this may be what's moving the markets, bill. ecb taking note of the cypriot department decision. the ecb is reaffirming the commitment to provide liquidity as needed to the cypriot bank. there was an implicit threat here that if they don't go ahead and put a tax on the deposits, the only place they can get money from, the ecb might not provide liquidity to the banks. the one thing we know, bill and maria, is there's going to be capital flight from cyprus. whether they have a tax on the
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deposit s or not, there's going to be capital flight and they'll need to replace that capital from somewhere. the ecb will be stepping in to provide that liquidity, and the concern was, will they be there if they don't vote for it? this was an important affirmation, so now will they troika partners replace the rules? you need $17 billion, you go raise the other $17 billion. we'll see if they're any more flexible on that now. >> what a move in the market. 35 minutes before the closing bell sounds on market. we've got a market that is now down about 18 points there. >> lulu llemon revealing a big problem. about 17% of its yoga pants are too see-through. the stock down sharply on fears this will hurt their bottom line. but is this pullback a buying opportunity for investors? we have that trade, coming up. >> are you telling me that the sheer issue is the reason that stock is down that much? >> that would be it. >> and the nfl trying a new game
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product recall. so is this weakness a buying opportunity or not? let's start talking numbers on lululemon. on the technical side of the story is richard roth, and on the fundamentals, john stevenson is with first asset investment management. gentleman, good to see you. now lululemon has been a very good performer for a long time. rich, let's start with the chart. how due the lululemon chart look to you? >> maria, the stock is absolutely not a buy on today's breakdown. in fact, it's a very strong sell. look, even coming into today, the stock has been lagging the broader market. you were down 13% on a year-to-date basis. you see, we've been mired in this well-defined seven-month trading range, bounded by 77 on the high end, 65 on the low end. today we take out that critical low end support at 65. that projects critical downside from $53. you want to sell it right here. >> wow, john, you agree with that? >> oh, absolutely not.
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this is a great buying opportunity. the problems of today are short-term, they're supplier related. this is a company with absolutely -- that's absolutely transformed the whole athleticwear business. it's fashionable, it's durable, it wears really well, it's worth the premium. this is growing incredibly fast. it should grow at ecommerce by over 50% in the next year, and it's got great international growth. i think this is a very strong buy. >> look, maria. i would say that yoga's pretty simple. you need two things, you need pants and you need a mat. if you can't sell the pants and up 3,000 percent in four years, i don't want to be involved in that stock. i'm still a seller right here. you can buy the stock, 53, maybe even 44 by the end of the year. >> what about that? >> well, it's been growing at 30%, for almost 13 quarters. this is phenomenal growth. i think, in fact, if you look at this on a peg ratio, it's closer to 1. so it's very reasonably valid on that basis. i would say this is a great
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opportunity to get in here and to buy it. and you know, i think as i said before, this is really short-term problems. this is where it oppose up a great buying opportunity for you. >> well, this is a pretty big short-term problem, maria. you know, same-store sales going from 11% down to a range of 5 to 8%, just on this one product alone, that's a pretty big misstep in my game. >> all right, we'll leave it there. great conversation on both sides. you made some terrific insight. we'll have to keep watching. gentleman, thanks very much. >> thanks, maria. crazy last hours, some volatility coming into play. but right now the dow with about 30 minutes left, down 17 points. >> john malone's liberty media requiring a big stake in charter communications. is malone the one-time cable kingpin just getting started on cable buying sprees? >> and adobe systems getting ready to set earnings. when the bell rings, we'll talk exclusively to the ceo just minutes after those numbers are out, so stay tuned. tdd#: 1-800-345-2550 opportunities are waiting to be found in faraway places.
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stake in charter communications, for close to $3 billion. >> and it sounds like this may be just the beginning as well. earlier on cnbc, liberty media's ceo greg mafee said this to say. >> we have the increase our stake up to eventually 40% after three years. so the potential is there. >> so what's next and what does this mean for the cable landscape? and is this a deal to buy for investors? is that a signal? joining us right now, amy young and thorton crockett. good to see you both. amy, you heard what ceo greg maffei said, there's potential. is this the beginning for liberty media and charter. do you think we see a string of further deals? >> i think so. i think now that he's established his position in charter, i definitely think this is the first of many moves. i think he will eventually take it up to 35%. and i think he'll be in the u.s. cable business for many, many years.
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>> oh, yeah. martin, as you know, john malone is one smart cookie and a tough negotiator. he never pays retail. what do you think he's got up his sleeve here, taking this position in charter? what's going on here? >> well, liberty media is sitting on nearly $2 billion of cash and cash is earning almost nothing. so putting in something is better than earning nothing. so that's one of the motivators here. but, clearly, this guy knows the cable industry. he has a longer perspective, a better perspective on this than most people on the planet. i think it's interesting that he's bullish on cable, certainly bullish on charter, but it's hard to see this as anything but that john malone likes cable. >> how do you want to allocate cable to get a piece of this action. >> i like liberty, but that's still principally a play on sirius xm. that's about 70, 75% of its market cap right now. i like liberty, because i like sirius. i think it's a great future for sirius.
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but that said, there's a time where liberty might not own sirius. they might spin it off. and at that point, it really becomes, you know, a cable company, and these other investments. so he's really setting the groundwork for a future of liberty that, you know, could be interesting, it could be quite different than what we see today. >> amy, you have had a neutral rating on charter to this point. does the malone investment change that? >> well, you know, we downgraded the stock when the stock hit around $80, well before malone even hinted that he would do something like this. but i think for people who are on the sidelines, this definitely could potentially change your decision. and i think you could see a lot of people grow a lot more constructive on the name. especially since it's just hard to bet against john malone. he is smarter than every media investor out there. >> what are the growth prospects of the entire business? where does the growth come from, would you say, in the next three to five years? >> well, historically, charter has underinvested on the video side. right now it is the fastest
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growing cable company, it has the best footprint in the industry and the best management team. so i think there's a lot of growth that still -- that we're still seeing over the next two years for charter. >> and you know, barton, you wonder if there are other companies out there that mr. malone might look for. cablevision has been rumored to be in play lately. is that a possible kand, do you think? >> i don't want to go too far down the road of saying what they might or might not buy. it's clear they're fully invested now with putting their cash into charter. they don't have cash sitting on the sidelines now to go out and chase other things. if there is nor consolidation, i would expect it would happen through charter. certainly the ceo at charter was at cablevision. could that mean nothing? potentially. it's an interesting thing to speculate about, but i don't know. >> quickly, what do you think, amy? >> i think one of the bigger themes coming out of earnings, has just been rising per costs. i think you could definitely see a lot more industry consolidation and i think malone could use charter as a vehicle for that. >> all right. we'll leave it there. good to have you both on the
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program. thanks so much. >> thank you. >> i want to get to bob pisani. you've got some breaking news here on the future of the new york stock exchange. over to you, bob. >> and we've got an amended filing here for the nyse ice merger. it contains something very interesting, maria. what's the name of the company going to be? we've been wondering this for a long time and now we know. it's going to be called ice group and ice intercontinental exchange, the company itself, and the nyse, will become wholly owned subsidiaries of ice group. essentially two companies operating under the umbrella of ice group. the symbol will be ice, i.c.e., it will not nyx, the current symbol of the new york stock exchange. this is very interesting, because a lot of people wondering would the nyse be in the name of the new company? it will not be, but that would make it easier to spin off a subsidiary later called nyse, at least that's what some people are thinking. i'm still combing through the
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report. we've got a market well off the lows, but still down about 12 points on the dow jones industrial average. >> coming up, we'll hear from one strategist who says this three-day losing streak we've been seeing is is a buying opportunity. but here's the kicker. until recently, he had been one of wall street's biggest bears. >> and forget smartphones. they're so five minutes ago. it's all about smart watches these days. apple is reportedly working on one and samsung announces it will enter the smart wach market. will these devices live up to the hype? it's all coming up on "closing bell." urned heinto a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would make money doing what i love. [ robert ] we created legalzoom to help people start their business and launch their dreams. go to today and make your business dream a reality. at we put the law on your side. governor of getting it done.
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. welcome back. after all that . welcome back. after all that debate, the cyprus parliament rejected the tax on bank depositors today. >> what a surprise, right? joining us with the latest, joining us tonight, live from athens, we have stelios boros, and we're going to have a very long audio delay, but we'll try to bear through that. what can you tell us about what's going on there right now? there are concerns that if they reject the proposal from the eu and this bank deposit tax, that they're going to go bankrupt. is there a fear of that right now? >> yeah, that's right, there is a fear of cyprus going bankrupt. the vote this evening on the
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bank deposits tax was a resounding no to the proposal prepared for cyprus, from troika, from its european union piers and from the imf. so the fact that this proposal has now been thrown off the table opens a large amount of uncertainty in regards to cyprus' future. >> so, what are the alternatives, then, in terms of this bailout? is this the bailout now dead on arrival? how is this paid for? >> well, the fact is that from now on, there are many questions in terms of what this bailout will comprise of. let's not forget that that cyprus had asked for this bailout last summer. and now they reached this summer stage in march. so it took many months, even to reach here. so from now on, they're starting anew, full negotiations. from what we understand, there will be meetings in brussels in an attempt to find a formula
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which is acceptable for cyprus, which cyprus will accept to impose on its people. alongside this, we expect negotiations to continue between cyprus and russia. >> now, you probably know that the ecb commented just moments ago, they're taking note of the decision by the cypriot parliament, but they are also reaffirming a commitment to provide liquidity as needed within the existing rules. is it possible that they move the line that's been drawn in the sand and that the liquidity will be provided without having to tax bank deposits? >> that's a very good point. and generally, it's very interesting to see who it is that will be backing down as these negotiations continue. as you pointed out, the ecb did come out with a statement a few minutes ago. they stressed that they will continue with providing liquidity to the cypriot banks, but under certain conditions.
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earlier today the cyprus' central bank governor told the parliamentary economic committee that when cypriot banks reopen, they've been given a bank holiday until thursday, they expect a large run on deposits in the event -- with all of these problems. so, either way, we are looking at a volatile situation. >> all right. we will leave it there. we'll keep watching that volatility. thanks for joining us, on the ground in athens tonight. we will see you soon, stelios. >> all right. heading towards the close. about 15 minutes left here. modest decline. we could go either direction here. the dow down 13 points right now. >> one of wall street's biggest bears, meanwhile, turns bullish. morgan stanley's adam parker will tell us what's behind the conversion. why he's taking his target prices up. also, nfl teams are getting ready to make big investments in college players at next month's draft, but the league is about to make its own investments that could score a big return. a top nfl executive explains why
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a bear a bear turns into a pull.
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well, morgan stanley's adam parker, who i happen to know doesn't like price targets, has raised his price target on the s&p to 1600 from where it was at 1343. why has he turned so bullish? we're going to ask him right now. >> he joins us right now along with brian capski. adam, you first. now, you have been negative for a long time. obviously, this market has been hitting record after record. do you think there's more to run here? >> well, look, we've had a cautious stance. all we really did is just raise our view of the multiple, because our house calls, we're going to keep doing the quantitative easing. we think the quantitative easing has really made the multiple higher. i don't really think it's a difference in my tenor since last labor. we haven't been telling people to short the market, we just think it's ahead of where it should be, but we don't know if the end is in sight.
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>> well, we've talked about this before. you know, as maria suggests, you've been cautious on the markets, because you've been worried about the quality of earnings, that the quality has been eroding, as we go along here. but what you didn't, i guess, take into account was the impact that all the fed liquidity would have on the markets. so i'm wondering why now, why would you be raising your price target? >> well, i think our house call is that you're going to see the qe all year long, that they're going to keep bond yields lower for longer. i didn't actually change any 2014 earnings at all. so it's not really a fundamental view. you know, our call a year ago was that you'd see weak earnings growth in the second half of the year. in fact, you saw that. you saw the biggest security come down 40%. you saw the lows bond yields ever. you saw limited gdp growth. i think if you used any logic related to historical data in terms of growth or rates, it would have been hard to argue the multiple would expand. i think it's been qe and i think
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we have increased conviction they're going to keep doing the qe. so i don't want to -- i'm not telling people in practice to short the market, so i just wanted to raise my view of the target that way. but i honestly think the more important implication, guys, is how do you keep outperforming the market and the kind of stocks that are going to work in a environment of sustained qe. and that's really what we focus on day to day, when we talk to people. >> you've been right, brian, on this market. we know that. are you still putting new money to work in a market that's up 10% year-to-date? >> sure, maria. you know, for one thing, we think it's a fool's game to try to time the market, short-term. remember, we're long-term investors, and we've correctly called the market for the last few years, based on our process and analytics, and we've stuck with that process and we've been less than fortunate to be correct. however, given that the market has run like it has, it's kind of, bill and i were talking before the hit, and you know, you've got to be careful what you ask for. we're getting a little bit of volatility in the marketplace and it's providing an opportunity. but we do think bottom line, u.s. stocks in particular are
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the best asset in the world. we think we can get stocks a little bit cheaper. we are extremely and expressly comfortable with our 1575 target for this year. >> and isn't it ironic now that you trail adam parker. that he's got a higher price target than you do. let's get to his question and i'll ask him the same thing. he talks about, how are you going to outperform this market? what are you going to invest in that will do better going forward? >> we believe from our work that we are transitioning, bill, from denominator doubt to denominator believability. that they believe in the fundamental prowess of equities. that's number one. number two, it's clearly moving into more of a stock-picking oriented market. yes, stocks are important, yes, asset allocation is important. but as the deviation environment within stocks from a fundamental perspective and technical perspective increase, you have to be a stock picker. >> you have to be a stock picker, adam parker, so where do you see the leadership? you're taking your target up
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here. what leads that rally that you are now envisioning? >> well, we have three main themes we've been focusing on and then a few sectors. what we want to buy u.s. equities that have a lot of china exposure. we think that a basket of u.s. equities with china exposure should not trade at a discount like it does. we want to keep buying companies that have high and growing dividends. we think bond yields are going to stay low and that's going to remain attractive. and we like higher quality equities, simply because we just see risk of bankruptcy is very low, and therefore we have a low probability of a lower quality junk rally. our sector bets, maria, are overweight health care, industrials, and technology. there we just think we have more reasonable prices, better capital deployment, a better estimate achievability. >> quickly, your favorite sector? >> sectors are technology, industrials, energy, from a thematic basis, discipline value and dividend growth. not yield, but dividend growth. >> great to see you.
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brian, adam, thank you. thanks for your thoughts today. we're coming back with the closing countdown. stick around. we'll find out whether the dow and s&p can remain positive or whether we have this three-day sell-off. >> then the ceo of software maker adobe systems will be with me breaking down his company's earnings, before he speaks to analysts. you're watching the "closing bell" on cnbc, first in business worldwide. investor. yeah, i'm a serious investor but i'm a busy guy. it used to be easier but now there are more choices than ever. i want to know exactly what i am investing in. i want to know exactly how much i'm paying. i want to use the same stuff the big guys use. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. it's lots of things. all waking up.
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crazy crazy day. crazy day. volatility is back. >> but this market will not quit. that's the bottom line. >> and i'll tell you what, as much as we downplay the size of cyprus and its impact economically on the eu, it has had an impact on our markets. this is when we thought we'd heard that the finance minister in cyprus had offered his resignation and it wasn't accepted. now he's denying that he's offered his resignation. whatever that means. and then we get this move here in the last hour on talk that maybe the ecb was going to offer more liquidity, which they've confirmed, but what does that mean? are they going to bail them out or not? we'll see. we're moving higher here.


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